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2014 (7) TMI 580 - AT - Service TaxIrregular availment of CENVAT Credit - Availment of credit for Unit I and Unit III - non distribution of input service credit by the Head office - Penalty u/s 11AC - Held that:- The registered office and Vatva office both are located in the same place and appellant has simply utilized the credit at Vatva instead of distributing it to various units. As submitted by the learned counsel, during the relevant period, there was no restriction for utilization of such credit without allocating proportionately to various units. The omission to take registration as an Input Service Distributor can at best be considered as procedural irregularity and in view of the decisions cited, has to be considered sympathetically. Further, it is also noticed that appellant has not got any extra benefit by doing this. In fact from the statement of Shri Chandresh C. Shah, as explained that above Cenvat credit available to them, 20% of service tax payable only was paid and balance was paid in cash. In fact, proper distribution would have enabled them to utilize full credit. It would show that the exercise is totally Revenue neutral and no loss has been caused to the Revenue (in fact Revenue has gained). In the absence of any legal requirement to avail credit based on the services received during the relevant time the procedural irregularity has to be ignored and the demand confirmed has to be set aside on this ground - it is not the case of the department that the credit was not at all admissible. The case of the department is that the credit is admissible but should have been taken in Unit-3. - Following decision of Doshion Ltd. [2012 (10) TMI 952 - CESTAT AHMEDABAD] - Assessee made out a case in their favour - demand for Cenvat credit with interest and penalty equal to the same imposed under Section 11AC of Central Excise Act, 1944 are set aside - Decided in favour of assessee.
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